PRESS KIT. FY17 data (31 January 2018)

Transcription

1 PRESS KIT FY17 data (31 January 2018)

2 COMPANY PROFILE Inditex is one of the largest fashion distribution groups worldwide. It has 7,475 stores in 96 markets and 47 online markets. It has 8 commercial formats: Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe. The Group also includes companies linked to the different activities that from part of the business of design, manufacture and distribution of the textiles. Its sustainable and integrated model of stores and online, based on innovation and flexibility, and its way of understanding fashion (quality design and creativity, together with a response adapted to the market demands) have allowed for rapid international expansion and an excellent acceptance of the different commercial concepts, both in brick-and-mortar stores and online. The first Zara store opened its doors to the public in the year 1975 in A Coruña (in the north west of Spain), where the Group started its activity and where it has its headquarters. Today stores from the Inditex group can be found in hundreds of cities on the five continents, mostly in the most relevant commercial arteries. 2

3 Inditex is listed on the stock market since 23 May 2001, after making a Public Offer for Sale of Shares that elicited great interest from investors all over the world, with demand being 26 times higher than the volume of the supply. The shares are included in the main Spanish and international stock markets. Inditex s sales in 2017 were of 25.3 billion euro and a net profit of 3.3 billion euro. On 31 January 2017, the Group had 171,839 employees. The following table shows the most significant figures of the Group for the last two years: Sales (billion ) Net profit (billion ) Number of stores 7,475 7,292 Number of markets Employees 171, ,450 3

4 EIGHT BRANDS With the objective of personalising its approach to different market segments, Inditex avails of eight fashion distribution brands. All of them share the same commercial and management approach: to be leaders through a sustainable business model. Each of the brands has great autonomy for managing their business. The management teams are independent when making commercial decisions and in the way they administrate their resources. However, the fact of pertaining to a group that is present in 96 markets provides them with a large number of organisational synergies and knowledge management. Thus, each management team can concentrate on the development of its business knowing that certain support elements for the same are covered by the accumulated experience of the Group. Inditex, as the parent company, is responsible for the central corporate services, that is to say, those shared by the eight brands and that facilitate international growth such as administration, the use of logistical technology, the general policy for human resources, the legal aspects, the financial capacity, etc. Below is a summary for the principal data for each of the brands in the year 2017: Sales 16,620 1,747 1,765 2,227 1, Stores 2, ,098 1, Markets Online markets

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13 A SUSTAINABLE BUSINESS MODEL The sustainable business model at Inditex is characterised by a high level of integration where all of the phases of the fashion process are carried out: design, supplies, manufacture and quality and control of the product, logistics and sales in own stores, both brick-andmortar and online. All of this has the objective of creating attractive, ethical and quality products that are Right to Wear. This is to say, fair to customers, to those that work at and for the company, to the communities where the company operates and to the environment. In order to generate value, Inditex has a flexible structure and strong orientation towards the customer in all areas of activity. 13

14 AN INTEGRATED MODEL FOR BRICK-AND-MORTAR AND ONLINE STORES A key element of this model is the stores, both brick-and-mortar and online, very carefully designed spaces, thought out to make customers feel comfortable with the fashion and where they can find the information necessary to adjust the offer in accordance with their demands. This integrated model for brick-and-mortar and online stores is capable of adapting the offer to the customer s wishes. The vertical integration permits availability of great flexibility, reducing the inventory to a minimum, decreasing the risk-fashion as much as possible. The point of sale, both brick-and-mortar and online, does not close the process but rather restarts it, acting as a market information gathering terminal that feeds the design teams and reports the trends demanded by the customers. The brick-and-mortar store receives priority attention to its design, both interior and exterior. Inditex transfers the principles of its commercial philosophy to the architecture of its stores: design, permanent innovation and local adaptation to customer expectations and the requirements of the surroundings. The window displays play a very important role, they are true publicity for the eight brands of the Group on the main commercial streets in the world. With regards to interior design, the brick-and-mortar stores respond to the objective of creating a diaphanous space where the clothes take on the spotlight, removing any barriers between the garments and the customers. 14

15 Eco-efficiency is also a priority in the design of new stores for the group, and the existing stores are being renovated and updated in order to comply with the objective of having all eco-efficient establishments by the year On the other hand, the internet has become a new global display for Inditex. The principle development strategy for the commercial formats of Inditex is the opening of ownmanagement stores, which are managed by a company where Inditex holds the entirety or majority of the social capital. In markets of reduced size or cultural differences, the Group has extended the network of stores through franchise agreements with local leading companies in the retail sector. At the end of 2017, there were 1,055 franchise stores in a total of 7,475 stores. The principal characteristic from the business perspective in the Inditex franchise model is the total integration of the management of the franchise stores in areas such as window displays, product, human resource training, logistics etc. This ensures the homogeneity necessary for the global image and management of Inditex for customers in any country in the world. 15

16 DESIGN The success of the collections resides in the capacity to recognise and integrate the constant changes in fashion trends, continuously designing new models that respond the customers wishes. Inditex takes advantage of the flexibility of its business model in order to adapt to the changes that may occur during campaigns and, in this way, reacts to them with new products in the brick-and-mortar and online stores. The models for each campaign are integrally developed by the creation teams of the various brands. Over 1,000 designers use prevailing fashion trends on the market and the customers themselves as principal sources of inspiration, through the information received from the stores. 16

17 SOURCING Inditex works with suppliers and manufacturers from 50 different countries in order to supply the majority of the products. 60% of this production is carried out near the company headquarters in Arteixo (A Coruña, Spain), mostly in Spain, Portugal, Morocco and Turkey. In this complex process, Inditex follows a clear principle: to receive supplies in a responsible and sustainable manner. For this reason, all suppliers and manufacturers of the group in the world must comply with the Code of Conduct, which demands the highest standards of responsibility, protection of human rights and promotion of international work standards. PRODUCT Inditex carries out its production in a gradual and precise manner, with short runs with a certain number of units, avoiding excess, without production peaks and always looking towards sustainability. Part of the production is carried out in the 11 factories that pertain to the group, which focus on the manufacture of the garments that include a greater fashion component. However, regardless of the location of the manufacturers, Inditex guarantees that each article put on sale is healthy, safe and environmentally sustainable. For this reason, it has developed an exhaustive system for quality control and testing. 17

18 LOGISTICS The entire production, regardless of its origin, is received in logistical centres in each of the brands in Spain, which simultaneously distribute to all stores in the world with an elevated and constant frequency. The distribution is carried out twice a week, always including new models in each shipment which allows for constant renovation of the offer present in the stores. In the same way, the platforms also distribute to the online distribution centres that the group has in different parts of the world. The logistics system, based on IT applications developed by the company s teams, makes it possible that from the receipt of the order in the distribution centre to the delivery of the merchandise at the store, an average time of 36 hours passes for European centres, up to a maximum of 48 hours for stores in America or Asia. 18

19 RIGHT TO WEAR Right to Wear is the concept that serves to illustrate the way in which Inditex conceives its activity: passion to create fashion and to help customers, acting responsibility in the different areas of activity. For this reason, Inditex is firmly committed to sustainability with everything it does. However, regardless of the location of the manufacturers, Inditex guarantees that each article put on sale is healthy, safe and environmentally sustainable. Sustainable growth, a demand from customers and society as a whole, is a shared value on an internal level and which the company extends to its suppliers. This sustainability strategy is articulated in the social scope relative to the Code of Conduct and Responsible Practice, of internal application; and the Code of Conduct for Manufacturers and Suppliers, which demands the highest standards of responsibility, protection of human rights and promotion of international work standards. In the environmental scope, there is a Strategic Environmental Plan. Inditex promotes the use of sustainable raw materials, collaborates with partners that are experts in the efficient use of resources and invests in new technologies to manufacture environmentally sustainable products. Also, it provides its customers with a place to deposit their garments when they have decided they are finished with them and is working to provide them with a second life or recycle them. All actions by Inditex in the corporate responsibility scope are audited by external agents of international relevance. Transparency is a fundamental value in the management of Inditex and it permits a frank and open relationship with all of the groups of interest by assuming the expectations of employees, customers, suppliers, shareholders, community and surrounds as its own. The efforts by Inditex in this field have been recognised internationally. 19

20 INTERNATIONAL EXPANSION The first Zara store opened its doors in the year 1975 in A Coruña (in the north west of Spain). In the following decade, new establishments continued to be opened throughout the Spanish territory. In 1988 a store was opened in Porto (Portugal) and in the immediately posterior years the first stores outside the Iberian Peninsula were opened, in New York (1989) and Paris (1990). Thus began a process that would lead to the current presence in 93 markets. The success among people, cultures and generations that, despite their differences, share a special awareness of fashion that resides in the belief that there are no borders that can impede sharing the same culture of clothing. The usual penetration plan for a new market is based on opening a reduced number of brick-and-mortar stores, in such a manner that the opportunities in a specific country can be explored, in order to continue earning critical mass. The new formats incorporated to the group since 1991 share the same international focus as Zara. In fact, this is one of the basic characteristics. In consequence, they have all grown simultaneously in Spain and in other countries. In the majority of the cases, Zara has been the first brand to reach the new countries, accumulating experience that has facilitated the later implementation of the other concepts. 20

21 INDITEX S STORY Amancio Ortega Gaona, founder of Inditex, began his business activity as a manufacturer of clothing garments. The business grew progressively over this decade until it reached several manufacturing centres that distributed the product to various European countries. Zara began its journey with the opening of its first store in a central street in A Coruña (Spain). Zara s fashion concept received good social acceptance that allowed it to extend its network of stores to the principal Spanish cities. Creation of Inditex as the head of a Group of companies. The bases of a logistics system that is suitable for the strong pace of growth anticipated were created. The first opening of a Zara store beyond the Spanish territory took place in December 1988 in Porto (Portugal). The Group began its activity in the United States and France with the opening of establishments in New York (1989) and Paris (1990). Birth of the brand Pull&Bear and purchase of 65% of Massimo Dutti. Inditex acquires the entirety of the share capital for Massimo Dutti. The Bershka brand was launched, aimed towards the younger female public. Acquisition of Stradivarius, which became the fifth brand in the Group. Inditex installed its central services in a new building located in Arteixo (A Coruña, Spain). Launch of the lingerie brand Oysho. On May , Inditex was listed on the stock market. Inditex began the social inclusion program for&from, favouring the work integration of people with disabilities in stores created ad hoc. Opening of the first Zara Home stores, the seventh brand in the Group. Inditex inaugurated its second distribution centre in Zaragoza (Spain), called Plataforma Europa, which completed the activity of the logistical centre in Arteixo (A Coruña, Spain). The Group opened store number 2,000 in Hong Kong and reached commercial presence in 50 markets in Europe, America, Asia and Africa.

22 Pablo Isla is appointed as CEO. Inditex opened store number 3,000 in Valencia (Spain), a Zara Home located on one of the most important commercial streets in the city. The Strategic Environmental Plan was presented. The Group inaugurates two new logistics centres in León and Meco (Madrid). Thus, Inditex now had eight logistics platforms in Spain. Zara Home is the first brand in the group to begin online sales. The group signed a framework agreement with the international federation of trade unions, IndustriALL. Launch of Uterqüe, specialised in fashion accessories that became the eighth brand in the Group. Inditex opened store number 4,000 in Tokyo and opened its first eco-efficient store in Athens (Greece). Stradivarius, Bershka and Pull&Bear opened their first stores in China. Zara reached 50 establishments in Japan. Inditex opened store number 5,000 in Rome. Zara began online sales in Germany, France, Spain, the United Kingdom and Portugal. Pablo Isla was appointed as Chairman of Inditex. All formats in the company began online sales. Zara debuted a new store image. Inditex reaches 6,000 establishments. Zara opened its first store in Algeria. The Group began online sales in new markets such as Canada or Russia. Zara opened its first store in Albania. The Group began online sales in new markets such as Mexico and South Korea. Inditex exceeded 7,000 stores with the opening of Zara in Hawaii, and reached 29 online markets with the incorporation of Hong Kong, Macao and Taiwan. At the end of the year, the Group distributed 37.4 million euro among 78,000 employees in stores, manufacturing, logistics, brands and subsidiaries, by closing the first section of the Extraordinary Plan for Employee Participation in the company profits in 2015 and Inditex was recognised as a sector leader in the Dow Jones Sustainability Index, reinforced its agreement with the international federation of trade unions, IndustriALL, and launched the Strategic Environmental Plan The Group opened five new markets (Aruba, Paraguay, Nicaragua, Vietnam and New Zealand) and reached 93 markets, 41 with online sales. 22

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